Canadian power producer Innergex Renewable Energy has agreed to acquire Vancouver-based Alterra Power for C$1.1bn ($857.8m) in a move to diversify its energy portfolio.

Alterra, which was founded in 2011 by the merger of Magma Energy and Plutonic Power, is expected to complement the current operating, under construction and prospective projects of Innergex.

Innergex anticipates to significantly accelerate its growth profile with the transaction while reaching a net installed capacity of more than 2GW by 2020.

Through the acquisition, Innergex is expected to expand geographic and technological diversification of its power assets, with considerable footprint in the US and Icelandic power markets. It would also add geothermal electricity generation to its production mix from Alterra.

Innergex president and CEO Michel Letellier said: “The geographic and energy sources profile of Alterra's portfolio further diversifies Innergex's asset base by adding operating hydro and wind projects in Canada, a large number of operating, under construction and prospective wind projects in the U.S. and operating geothermal assets in Iceland.

“Further, we believe that the addition of Alterra's seasoned and experienced team to Innergex's team enhances our ability to concurrently develop multiple projects across many geographies.”

Following the acquisition, Innergex will increase its net power generation capacity by over 40% to over 1.6GW which includes assets under construction.

Innergex would also be adding 686MW capacity coming from three advanced-stage prospective projects through the deal.

Alterra executive chairman Ross Beaty said: “Innergex is an outstanding Canadian clean energy company with highly complementary renewable energy assets to those of Alterra and a similar corporate culture.

“The combined company will have a lower cost of capital, stronger balance sheet, more diversified asset base and greater capacity to grow rapidly and efficiently.”

The amount offered by Innergex also includes the assumption of Alterra's debt. As per the terms of transaction, Alterra shareholders will get an aggregate consideration which will consist of around 25% in cash with each share priced at $8.25 and 75% in common shares of Innergex.

The transaction would need the approval by Alterra's shareholders along with meeting of other customary closing conditions including regulatory approvals in Canada and the US.

Image: Alterra's Toba Montrose run-of-river hydro power plant in Canada. Photo: courtesy of Alterrapower/